Fayetteville City Council approves reorganization plan for PWC

Tuesday

After months of debate, the Fayetteville City Council has approved a reorganizational plan that seeks to exercise more oversight over the Public Works Commission.

The council voted 7-3 on Monday night to approve a resolution calling for the city to assume more authority over the utility's financial and legal decisions.

Among other matters, the city will begin managing the utility's excess reserves and direct the city attorney to oversee the PWC's legal budget and contract lawyers.

The resolution authorizes City Manager Ted Voorhees to hire DavenportLawrence consultants for a second-phase review of 13 areas of operation, such as human resources, budgeting, emergency management and call centers. The study will determine if consolidation of any of those areas with the city would save money, and if so, recommend a plan for merging.

The resolution culminates nine months of discussion since Voorhees in January outlined an ambitious plan for curtailing some of the PWC's powers, taking a serious look at combining departments and revising contracts to friendlier city terms.

The consultants in August said the city-owned utility, which was established by the state in 1905, had become too independent over the years, veering from its charter.

Voting against the resolution were Val Applewhite, Keith Bates and D.J. Haire.

Applewhite said the council has been talking about making changes with the PWC during her six years on the council. But now, she said, the resolution is calling for several changes to happen within 90 days.

"For me, this is moving very fast," she said.

Applewhite said DavenportLawrence initially said doing the entire scope of work would cost $400,000, which could be broken into several phases.

"For me, that is a lot of money," Applewhite said.

She said the city and PWC staff could do the consolidation study in-house.

The city, which paid DavenportLawrence $100,000 earlier this year for a five-month review of the PWC, has budgeted $100,000 for the second phase.

Voorhees has asked the PWC to contribute an additional $100,000 to speed up the work of the second phase, bringing the contract to a total of $200,000.

The PWC board has not acted on the request yet.

Mike Lallier, the PWC chairman, said after the meeting that the utility commission members have "generally agreed with the revised resolution" that passed Monday, but they have two concerns.

The first is they agree with Applewhite's suggestion to study merger in-house, among city and PWC officials, and save the city money.

"Secondly, we are concerned about the required transfer of all reserve funds to the city for management," Lallier said.

The worry, Lallier said, is a future council might be tempted to tap those reserves and spend them on city expenses, rather than on the utility.

Lallier said he hopes the city establishes safeguards for how utility reserves will be managed by the city.

The PWC has reserves totaling about $80 million. How much of that amount should be transferred to the city's management has yet to be determined.

Chavonne said any excess PWC reserves would be spent on utility purposes, with input from the council.

He said the resolution doesn't make major changes, and the council is not attempting to meddle with the utility's daily operations. He said the resolution was needed to more closely align the PWC with its city charter.

The utility's general manager, Steve Blanchard, said the commission members would remain open-minded about the four-page resolution.

"And they are willing to consider how they might change things to meet the intent of what the city is trying to accomplish," Blanchard said. "But until we get into the details, we really don't know exactly the impacts."

Bates said he voted against the resolution because the additional cost was a concern.

"Plus, I've always thought PWC is ran very well," Bates said.

Haire said he shared a concern that Applewhite raised last week about a potential conflict, if the PWC board ever wished to seek outside legal advice to challenge the council's direction.

The PWC, without the council's knowledge, spent about $10,000 to hire a lawyer to review the charter earlier this year when the first study by DavenportLawrence was underway.

The city-owned utility is a big operation, with almost 600 employees, a $346 million budget and tens of thousands of water, sewer and electric customers.

The council makes the appointments to the PWC board, which in recent years has sought to have a more collaborative relationship with the city.

Other action

In other business, the council:

Voted unanimously to name the trailhead of the next section of the Cape Fear River Trail after Moses Mathis, who died in July at age 76 and was known as the Bicycle Man for his award-winning charity with children at Christmastime.

"He has been such a great part of our community," said Haire, recognizing Mathis' widow, Ann, in the audience.

Voted 9-1, with Bates against, to approve a plan for establishing an economic development task force that would be overseen by the Economic Development Alliance, which is an arm of the Fayetteville Regional Chamber.

The council will receive regular updates, and the task force will have four subcommittees: corridor redevelopment; governmental regulations; workforce redevelopment; and new and existing industries.

Bates has opposed the task force since the council embraced the concept in August, calling it politically motivated during election time.

Staff writer Andrew Barksdale can be reached at barksdalea@fayobserver.com or 486-3565.

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